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Implementation of Project Portfolio Management - North

Carolina State Government

Overview Presentation

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Framework for Managing IT InvestmentsI. Strategic Business I. Strategic Business and IT Planning and and IT Planning and Investment Selection Investment Selection

and Budgetingand Budgeting- Investment Portfolio - Investment Portfolio

Management (IPM) – Build, Management (IPM) – Build, Buy, and/or Implement the Buy, and/or Implement the

Right AssetsRight Assets

III. Investment III. Investment Operation and Operation and

Maintenance, and Maintenance, and Renewal, Retirement, Renewal, Retirement,

or Replacement or Replacement - - Applications Portfolio Applications Portfolio Management (APM) – Management (APM) –

Maintain, Operate, Renovate, Maintain, Operate, Renovate, and Retire Assets in the Right and Retire Assets in the Right

Ways and TimesWays and Times

II. Project ImplementationII. Project Implementation -- Project Portfolio Project Portfolio Management (PPM) – Build and Implement Assets in Management (PPM) – Build and Implement Assets in

the Right Mannerthe Right Manner

Life Cycle of IT

Investments

Identify investments that best:

• Enable governmental initiatives, agency missions and strategies, or compliance mandates

• Result in financial returns – revenue generation or cost savings

• Provide better constituent services or program effectiveness

• Fit technical architectures

• Satisfy budget, staffing, and other constraints

• Meet risk profiles

• Clarifying roles and responsibilities

• Providing appropriate oversight

• Ensuring they are well planned and thoroughly researched prior to starting

• Following management and development methodologies, best practices, and lessons learned

• Defining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectations

• Completing them successfully so that business goals and objectives are realized and benefits accrue

Manage projects by:

Operate and maintain assets so that:

• Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminations

• Services offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgets

• Retirements and replacements are effected when assets are no longer cost-justified or risk-acceptable

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Overview of IT Portfolio ManagementAgency Missions and Vision and Business Goals and Objectives

Statewide and Agency IT Plans

Application Portfolio Management

Project Portfolio Management

Investment Portfolio Management

Identify Problems and Opportunities

Funded New ProjectsManage

Portfolio

Analyze Portfolio

Optimize Portfolio

Build and Maintain Inventory

Develop Business Drivers and Business Cases

Analyze Candidate Investments

Adjust Project Portfolio

Assess Value of Projects and Portfolio

Manage Portfolio

Implement Projects

Select and Plan Investments

New or Renovated Applications

Proj

ect

Prop

osal

s for

App

licat

ions

Ren

ovat

ions

,

Ret

irem

ents

, or

Rep

lace

men

ts

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Portfolio ManagementPortfolio management is: a strategic and dynamic decision-making process to assess value, prioritize actions, and allocate resources to meet key enterprise objectives. A portfolio is: a collection of items grouped together to facilitate efficient and effective management so that fiscal, staffing, and other scarce resources can be optimally allocated to provide the most benefits or greatest value for investments made. The objective of portfolio management is: to optimize the enterprise’s IT portfolios in order to contribute to the organization’s successful performance and its sustained viability, value, and growth. The major tasks of portfolio management are: inventory and classify items in the portfolios, identify problems and opportunities, develop viable options, determine relevant criteria and weights, evaluate alternatives using pertinent information, and make reasoned and appropriate decisions. The results of portfolio management are: fact-based, data-driven, and analytics-oriented management decisions, using a consistent and disciplined approach within a well-defined governance structure.

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Portfolio Management GoalsInvestment Portfolio Management (IPM):

Identify, evaluate, and prioritize candidate investment opportunities that meet strategic business goals and objectives in the most effective and productive manner by appropriately considering and weighing key factors, such as alignment with agency missions or governmental initiatives, satisfaction of compliance mandates, delivery of desired returns or public value, initial and life cycle costs, architectural fit, risk profiles, staffing availabilities, and the inter-relations among investments.

Project Portfolio Management (PPM):Advance the management of IT implementation projects by

assisting to clarify roles and responsibilities; provide for well-understood and comparable oversight; ensure they are planned well and researched thoroughly prior to starting; follow management and development methodologies, best practices, and lessons learned; facilitate the management and monitoring of them to achieve, budget, schedule, scope, and quality expectations; and complete them successfully so that proposed business goals and objectives are realized and anticipated benefits and value accrue.

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Portfolio Management Goals (Cont’d)

Inventory applications; assess them using a variety of criteria (such as agreement with agency business strategies or governmental priorities, benefits and value to agency missions or business processes, costs to maintain and operate, ability to meet current and future agency business requirements, operational performance, technical status, and risks; and develop a management strategy for continued investments in them to maximize value over their useful lives. This is done by: a) analyzing present and future status from business, financial, operational, technical, and risk perspectives; b) determining business-criticality of applications and risk-urgency of results from assessments; c) identifying areas of over- and under-investments and reallocating funds to give the most benefits or greatest value for monies spent; and d) developing the best approaches, priorities, and timeframes for enhancement, renovation, consolidation, elimination, or replacement. Assets should be retired when they no longer are cost-justified or risk-acceptable.

Applications Portfolio Management (APM):

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Why Lifetime Management of Applications is Important – Causes of Value Dissipation

As s

e t L

ife

Cyc

le V

alu

e

Phase of Investment Life CyclePotential or Expected Value

Selection Implementation Operation

100%

Lose 10 – 15%

Lose 5 – 10%

Lose 20 – 25%

Actual Value Realized

50-65%

• Lack of strategic business plan

• Not strategically aligned with business goals and objectives

• Business cases deficient in tenuous benefits, overly optimistic costs, too ambitious schedules, unrealistic staffing, optimistic risk assessments, and/or unachievable benefits/returns

• Poor architecture fit

• Inadequate investment evaluation, ranking, and selection processes (pick wrong investments)

• Lacking executive support• Weak project manager• Deficient project planning, monitoring, and reporting• Insufficient or inadequate requirements definition; contracting; and management of risks, vendors, testing, training, scope, quality, change, data conversion, communications, etc.• Failure to reengineer business processes• Over-customizing COTS packages• No or inadequate post implementation assessments (PIAs)

• Incomplete post implementation reviews without focus on value and benefits realization and change impacts (delivery on business case)• Lacking service management best practice framework (e.g., ITIL) and not implementing associated good processes• Inadequate asset management best practices – current and complete inventories; periodic assessments; management plans for useful lives; and business cases for renovations, replacements, or retirements

Adopted from PMO Executive Council Research

8Adopted and Modified From: PMO Executive Council research.

PortfolioManagement

(PM)Components

Investment PortfolioManagement (IPM) -Build the Right things

(skill mix is 75%busines/financial and

25% technical)

Investment/project idea screening Portfolio definition Portfolio segmentation and prioritization Business drivers identification Risk identification and probability/impact analysis Technical and business architecture fit Business case development Investment/project evaluation and prioritization (strategic fit, financialanalysis, and value assessment)

Fiscal and personnel resource availability, prioritization, and allocation Investment governance structure and process

Required Competencies for Comprehensive and EffectivePortfolio Management

Revision Date11/22/2005

Project PortfolioManagement (PPM) -

Build Things Right(skill mix is 75%

technical and 25%business/financial)

Project management methodology and standards (PMI) System development methodology and standards (IEEE) Project governance and organization structure and process Project planning and management Project manager coaching and development Compeititive bidding readiness Business/user readiness assessment Business case realization tracking Status tracking and reporting Requirements definition Fiscal and personnel resource estimation Stage-gating and ongoing reviews Design and technical architecture review Test planning and management Rollout planning and management Risk management and mitigation Quality assurance management Vendor and outsourcing management Service/operations management Security review Data confidentiality and personal privacy review Disaster recovery and business continuity planning Post implementation review

ApplicationsPortfolio

Management (APM) -Operating,

maintaining, andrenovating/retiring thethings in the inventoryof applications stock(skill mix is equallydivided between

business/financial andtechnical)

Service/operations management Technical and business architecture fit Vendor assessment for hardware/software support Technical and business knowledge availability Current and future strategic fit Business needs suitability Cost-effectiveness analysis Disaster recovery and business continuity planning Risk acceptability analysis Asset life cycle planning and management Investment governance structure and process

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Policy Drivers and IT Management Expectations for Project Management

Offer documents and administrative management capabilities that follow industry recognized best practices for system development life cycle and project management

Provide a “gated” review approach to ensure each project has performed all preceding work acceptably and is in position to complete the succeeding phase successfully, and to verify that it is still viable (i.e., continuing to offer worthwhile benefits and value within satisfactory cost and timetable parameters at desired quality levels and presenting an acceptable risk profile)

Provides a workflow process that encompasses project approvals, checkpoint reviews, and periodic status reporting at project, agency, and statewide levels

Enable the productive and effective management of projects

Employ governance to maximize the potential of project success

Support the consistent, disciplined, effective, and efficient performance of project governance

Legislative Mandates Drive IT Portfolio Management UseProvide stronger oversight of project management: Improve performance in costs, scope, schedule, and quality Increase reliability of achieving expected business results, projected benefits to citizens, and proposed value to the state

Guide and administer governance for project approvals and monitoring/status reporting

Prescribe information to be developed, maintained, and reported for programs and projects

Report program and project status and identify exception situations

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Objectives of Project Portfolio Management• Provide a framework for the governance process and disciplines

associated with the approval and monitoring of projects at the agency and State CIO levels.

• Tie the schedules, budgets, and objectives of investments (projects) to the business strategies and goals of the business cases underlying the approved funding requests – ensure alignment of project tactical actions with strategic business intentions by establishing a clear and direct linkage to the investment portfolio management process.

• Provide a sustainable approach to access individual project and project portfolio status on a frequent (near continuous) basis in order to identify risks and problems early, take proactive and positive actions for remediation, and as warrented, restructure or stop under performing projects in timely manner.

The ability of state IT organizations to implement investment projects successfully (within budget, on schedule, and with the desired business results) in a predictable and reliable manner is key factor for retaining the faith and support of its funding authorities and tax payers.

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Project Portfolio Management – Combination of Software Development, Project Management,

and Governance Disciplines and Concepts• Provides a workflow process that encompasses project

approvals, checkpoint reviews, and periodic (primarily monthly) status reporting at project, agency, and statewide levels

• Incorporates a “gated” review and approval approach at governance hierarchy levels to ensure past work is acceptable and project is in position to complete the succeeding phase successfully – due diligence path

• Offers administrative support for development sequencing and project management that follow industry recognized best practices for system development life cycle (IEEE) and project management (PMI)

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· Initiation Phase & Planning Phase Cost· Budget Information Section· Enterprise Architecture Questionnaire· Security Questions· Project Manager Interview (Completed by EPMO)· Proposed Budget - Level 1 Budget Cost Tab· Financial Benefits - Level 1 Benefit Tab· Alternative Analysis if over $10M investment cost· Business Driver Impact Statements - Strategic Impact

Tab· Summary Risk Profile - Risk Tab· Procurement Plan **· Planning & Design Phase Milestones and Key Project

Deliverables· Planning and Design Phase Staffing Plan· Project Coordination List (Completed by EPMO)

Project Initiation Signoff

Project Initiation Review & Approval

Implementation Review & Approval

Project Closeout

Planning / Design

Review & Approval

Planning / Design Signoff

Execution / Build / Pilot Review & Approval

Execution / Build /

Pilot Signoff

Implementation Signoff

Gate 1 Planning &

Design Approval

Gate 2 Execution &

Build Approval

Gate 3 Implementation

Approval

SCIO REQUIRED

Initiation Exit Criteria and Planning & Design Entrance Criteria

SC

IO/O

SB

M/

OS

C/A

&E

/ E

PM

OInvestment Cost = Project Cost (Initiation thru Closeout Phase) + 5 years Operations

Con

trib

utor

sR

evie

wer

s/A

ppro

vers

AG

EN

CY

Phase 1: Project Initiation Phase 2: Planning & Design Phase 3: Execution & Build Phase 4: Implementation

Phase 5: Closeout

Project Information SectionProject Charter

· Business Issues· Business Goals· Project Goals· Project Deliverables· Items Out of Scope· Proposed Strategy

Additional Requirements

· High Level Assumptions / Constraints

· Key Dependencies external to the project

· Project Organization and Roles

Planning & Design Exit Criteria and Execution & Build Entrance Criteria

SCIO REQUIRED

AGENCY DOCUMENT CHECKLIST*· Project Management Plan· Communication Plan· Change Mgmt Plan· Configuration Mgmt Plan· Project Test Plan· Acceptance Criteria· Quality Assurance Plan· Statement of Work (SOW)· Project Schedule· Training Plan

Execution & Build Exit Criteria and Implementation Entrance Criteria

SCIO REQUIRED· Updated Roles/Responsibilities· Updated High Level Assumptions / Constraints· Updated Key Dependencies external to project· Updated Significant Issues / Risks - Issues / Risk

Tab· Updated Technical Architecture System Design** · Updated Project Schedule / Milestones· Updated Budget Cost - Levels 3 & 4 Budget Cost

Tab· Updated Financial Benefits - Level 2 Benefit Tab· Project Status Reporting · Updated Business Case - Project Charter,

Budget, Benefits Estimate, Strategic Impact, Risk, Schedule, Cost Tracking

· Plan vs. Actuals· Updated Budget Information Section· Updated Security Questions· Monthly Status Reports Current· Updated Staffing Plan· Sponsor’s Approval of User Acceptance Criteria

AGENCY DOCUMENT CHECKLIST*· Disaster Recovery/Business Continuity Plan· Test and Acceptance Results· Pilot Results· Operations & Maintenance Transition Plan

* Click to go to Document Templates. Any documents checked on the Project Info tab in the PPM tool are required and should be placed in the Document Management Tab.

SCIO REQUIRED· Project Status Reporting· Plan vs. Actuals· Updated Significant Issues /

Risks - Issues / Risk Tab· Updated Budget Information

Section· Updated Security Questions· Monthly Status Reports Current

Implementation Exit Criteria & Closeout Entrance Criteria

Project Status Reporting :>= $500K = Monthly Status Reporting

EPMO QA REQUIRED

· Project Closeout **· Lessons Learned

AGENCY DOCUMENT CHECKLIST*

· Historical Records

State of North Carolina PPM Workflow for Projects > = $500,000

Version 3.901/12/2010

· Updated Roles/Responsibilities· Updated High Level Assumptions / Constraints· Updated Key Dependencies external to project· Significant Issues / Risks - Issues & Risks Tab· Project Schedule / Milestones· Budget Cost - Levels 3 & 4 Budget Cost Tab· Financial Benefits - Level 2 Benefit Tab· Project Status Reporting · Plan vs. Actuals· Updated Business Case - Project Charter,

Budget, Benefits Estimate, Strategic Impact, Risk, Schedule, Cost Tracking

· Updated Staffing Plan· Technical Architecture System Design Doc**· Approved Business Requirements Document· Updated Budget Information Section · Updated Security Questions· Monthly Status Reports Current· Updated Procurement Plan **Budget, Scope and Schedule (Triple Constraints) are Baselined

· Deployment / Rollout Plan

· Risk Management Plan

** Template provided in the PPM Tool NC HELP section and on EPMO website is required for these documents only.

AGENCY DOCUMENT

CHECKLIST*· Updated Agency Applications

Portfolio as required (APM)

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Project Portfolio DashboardProject Portfolio Dashboard